Quarterly Report MEDUSA MINING LIMITED
(AIM: MML)
QUARTERLY ACTIVITIES REPORT PERIOD ENDED 30 JUNE 2009
Medusa Mining Limited ("Medusa" or the "Company"), through its
Philippines operating company Philsaga Mining Corporation
("Philsaga"), announces its Quarterly Activities Report for the
period ending 31 March 2009.
Highlights for the June 2009 quarter:
* Phase I expansion to 60,000 annualised production, completed
ahead of schedule;
* Record production of 16,009 ounces (previous quarter 12,716
ounces);
* Record low cash costs US$198 per ounce (US$152 per ounce before
taxes, royalties and local production taxes);
* Resource base increased to 1,380,000 ounces at 10.8 g/t gold (an
annualised increase of 60%, or 518,000 ounces);
* Reserve base increased by 101% to 500,000 ounces at 14.9 g/t gold
which is sufficient to support a 5 year mine life at 100,000
ounces per year;
* Phase II mine and mill programmes on schedule to meet the 100,000
ounce annualised production target in Q1 2010; and
* Access to exploration tenements increased by 60 square kilometres
to approximately 880 square kilometres.
Geoff Davis, Managing Director, commented:
"This quarter has produced some exceptional results. We continue to
hit our targets on or ahead of schedule. The Co-O Mine continues to
vindicate its perceived upside with the continual discovery of new
high grade veins and extensions of current known ones.
"The Management is confident of achieving the growth targets which
the Company has set itself over the next financial year".
22 July 2009
For further information, please contact:
Medusa Mining Limited +61 8 9367 0601
Geoffrey Davis, Managing Director
Roy Daniel, Finance Director
Fairfax I.S. PLC +44 (0)20 7598 5368
Nominated Adviser / Joint Broker
Ewan Leggat / Laura Littley
Mirabaud Securities Limited +44 (0)20 7321 2508
Joint Broker
Peter Krens
Lothbury Financial +44 (0)20 7011 9411
Michael Padley / Libby Moss
COMPANY PROFILE: KEY POINTS:
Co-O MINE EXPANSION
* Resources at Co-O Mine are
1,380,000 ounces @ 10.8 g/t gold * Phase I expansion completed with
in 3,980,000 tonnes production of 60,000ozs
annualised achieved ahead of
* Reserves at Co-O Mine are schedule
500,000 ounces @ 14.9 g/t gold
in 1,041,000 tonnes * Phase II expansion to raise
production from 60,000 ozs to
* Forecast production FY 2009/10 100,000 ozs per annum in early
of 82,000 ounces 2010 is on schedule
* Phase I expansion completed * The Phase II Baguio Shaft has
been completed ahead of schedule
* Phase II expansion on schedule and has commenced hauling
to raise production from 60,000
ozs to 100,000 ozs annualised in Co-O MINE PRODUCTION
Q1 2010
* Gold production of 16,009 ounces
* Anticipated long term cash costs (compared to 12,716 ozs in the
of US$200 per ounce; previous quarter) at an average
grade of 14.28 g/t gold and
* Exploration area expanded to average cash cost of US$198 per
>880 km² along 70 km strike of ounce (US$152 per ounce before
the richly endowed East Mindanao taxes, royalties and local
Ridge production taxes)
Share capital as at 30 June 2009: * Gold production for the year of
Shares: 47,869 ounces at an average
168.691,960 grade of 13.30 g/t gold and
Unlisted options 3,030,000 average cash cost of US$213 per
ounce.
Listings:
Australian Securities Exchange Co-O RESOURCES UPDATE
(Home Exch)
Alternative Investment Market * Resources increased by 15% to
(London) 1,380,000ozs @ 10.8g/t gold in
ASX & AIM code: MML 3,980,000 tonnes
* Annual increase of 60% or
518,000 ounces
* Vein system strike length
increased by approximately 400
metres to the east to
approximately 1,400 metres
For further information contact: Co-O RESERVES UPDATE
Geoff Davis * Reserves increased by 101% to
Managing Director 500,000 ounces @ 14.9 g/t gold
contained in 1,041,000 tonnes
LINGIG COPPER
* Drilling with 3 rigs in progress
with an update due next quarter
KAMARANGAN PORPHYRY PROSPECT
* First pass drilling has located
a fertile diorite with copper
and molybdenum mineralisation
and adjacent copper-gold skarn
mineralisation
CORPORATE
* Conversion of 2 million options
at $1.25 to raise $2.5 million
* The Company's Philippines
subsidiary company, Mindanao
Mineral Processing and Refining
Corporation was granted a four
year tax concession
* The Company was added to the
S&P/ASX200 on 8 July 2009
* Consolidated cash balance of
A$33.1 million
PROJECT OVERVIEW
The locations of the Company's projects are shown on Figures 1 and 2.
(please see the link at the end of this announcement).
Co-O MINE
GOLD PRODUCTION
The production statistics for the current financial year are
summarised in Table I.
Table I. Gold production statistics
+-------------------------------------------------------------------+
| | | Quarter ended | Year ended |
| Period | Unit | 30 June 2009 | 30 June 2009 |
|------------------------+-----------+---------------+--------------|
| Tonnes mined | tonnes | 38,196 | 118,076 |
|------------------------+-----------+---------------+--------------|
| Ore milled | tonnes | 36,622 | 116,451 |
|------------------------+-----------+---------------+--------------|
| Head grade | gpt | 14.28 | 13.30 |
|------------------------+-----------+---------------+--------------|
| Recovery | % | 94% | 93% |
|------------------------+-----------+---------------+--------------|
| Gold produced (1) | ounces | 16,009 | 47,869 |
|------------------------+-----------+---------------+--------------|
| Cash costs (2) | US$ | US$198 | US$213 |
|------------------------+-----------+---------------+--------------|
| Gold sold | ounces | 19,510 | 47,869 |
|------------------------+-----------+---------------+--------------|
| Average gold price | US$ | US$926 | US$880 |
| received | | | |
+-------------------------------------------------------------------+
Note:
(1) Gold production, is actual gold poured during the period and
does not reflect changes in the balance of gold in circuit
(2) Cash costs refers to the cost of gold mined (net of
development costs), produced and sold and includes taxes, royalties
and local production taxes of US$46 per ounce (YTD US$40 per ounce)
Gold production for the quarter increased to 16,009 ounces (a 26%
increase from the previous quarter's production) at an average grade
of 14.28 g/t gold and cash costs of US$198 per ounce.
For the year ended 30 June 2009, the Co-O Mine produced a total of
47,869 ounces at an average grade of 13.30 g/t gold and cash costs of
US$213 per ounce.
Medusa is an unhedged gold producer and received an average gold
price of US$926 per ounce from the sale of 19,510 ounces of gold for
the quarter. For the year, the Company sold 47,869 ounces at an
average gold price of US$880 per ounce.
With Phase 1 of its expansion programme completed and the Phase 2
expansion programme on schedule, the Company is on track to deliver
approximately 82,000 ounces in the forthcoming fiscal year at an
anticipated cash cost of US$200 per ounce. A breakdown of forecasted
production ounces and cost per ounce by quarters for the next four
quarters is highlighted in Graph 1. (please see the link at the end
of this announcement).
PHASE I EXPANSION
The Phase I expansion to produce 60,000 annualised ounces was
completed in the quarter, ahead of schedule, with the results flowing
through in the June quarter's record production to date of 16,009
ounces.
PHASE II EXPANSION
Work on the Phase II expansion is on schedule.
(a) Baguio Shaft
The Baguio Shaft has been completed ahead of schedule and connected
to the Level 3 workings via an on-vein drive along the Great Hamish
Vein. Driving has now commenced south towards the Great Hamish
Footwall Vein. Stope preparation activities on veins in the vicinity
of the Baguio Shaft (Great Hamish and Jereme Veins) are in progress.
(b) Mill Expansion
Site works and fabrication for the installation of an expanded
crushing circuit are progressing on schedule. Provided key components
are delivered on time, it is anticipated that completion will be in
December.
(c) Tailings Dam
The work on the wall of the current tailings dam is nearing
completion. Construction of a new tailings dam will commence shortly.
ELECTRIC COMPRESSORS
The two electric compressors for the western end of the mine have
arrived and preparations for installation are in progress.
RESOURCE ESTIMATE
On 2 July 2009, a new resource estimate increase of 15% was announced
of 1,380,000 ounces at 10.8 g/t gold in 3,980,000 tonnes of ore. For
the year to 30 June 2009, the Co-O Mine resource base has increased
by 60% or 518,000 ounces.
Table II summarises the resources and Table III summarises the veins
with more than 50,000 ounces of contained gold. The new 3D model for
the Co-O Mine vein system is shown in Figure 3 and Figure 4 shows the
projection of the veins onto Level 5 with the drilling that has been
incorporated into the new resource. (please see the link at the end
of this announcement).
The drilling was focused on improving vein continuity to the west of
the Oriental Fault which has resulted (in conjunction with on-vein
development) in an increase in Indicated Resources, and also on
exploring for extensions to the east of the Agsao River.
The first resource wireframe shape has been modelled to the east of
the Agsao River. There are a number of drill intersections in this
area which are likely to form additional resources as continuity and
extensions are confirmed by additional drilling.
Table II. Co-O resource estimate to 14 June 2009
+------------------------------------------------+
| Category | > 0 g/t gold |
| |----------------------------------|
| | tonnes | g/t gold | ounces |
|-------------+-----------+----------+-----------|
| Indicated | 1,250,000 | 15.0 | 603,000 |
|-------------+-----------+----------+-----------|
| Inferred | 2,730,000 | 8.9 | 777,000 |
|-------------+-----------+----------+-----------|
| Grand total | 3,980,000 | 10.8 | 1,380,000 |
+------------------------------------------------+
Table III. Co-O resource estimate for veins containing >50,000 ounces
+-------------------------------------------------------------------+
| Vein name | Category | > 0 g/t gold |
| | |-----------------------------------------|
| | | tonnes | g/t | contained |
| | | | gold | ounces |
|-------------+-----------+--------------+---------+----------------|
| Central | Indicated | 484,000 | 11.17 | 174,00 |
|-------------+-----------+--------------+---------+----------------|
| | Inferred | 481,000 | 5.83 | 90,000 |
|-------------+-----------+--------------+---------+----------------|
| | Sub-total | 964,000 | 8.51 | 264,00 |
|-------------+-----------+--------------+---------+----------------|
| Jereme | Indicated | 71,000 | 14.90 | 34,000 |
|-------------+-----------+--------------+---------+----------------|
| | Inferred | 155,000 | 10.33 | 51,000 |
|-------------+-----------+--------------+---------+----------------|
| | Sub-total | 225,000 | 11.77 | 85,000 |
|-------------+-----------+--------------+---------+----------------|
| Jereme | | | | 24,000 |
| West | Indicated | 51,000 | 14.31 | |
|-------------+-----------+--------------+---------+----------------|
| | Inferred | 152,000 | 7.90 | 39,000 |
|-------------+-----------+--------------+---------+----------------|
| | Sub-total | 203,000 | 9.52 | 62,000 |
|-------------+-----------+--------------+---------+----------------|
| Great | | | | 202,000 |
| Hamish | Indicated | 179,000 | 34.98 | |
|-------------+-----------+--------------+---------+----------------|
| | Inferred | 250,000 | 9.79 | 79,000 |
|-------------+-----------+--------------+---------+----------------|
| | Sub-total | 429,000 | 20.32 | 280,000 |
|-------------+-----------+--------------+---------+----------------|
| Great | | | | 101,000 |
| Hamish FW | Inferred | 385,000 | 8.19 | |
|-------------+-----------+--------------+---------+----------------|
| | Sub-total | 385,000 | 8.19 | 101,000 |
|-------------+-----------+--------------+---------+----------------|
| Edphil | | | | 31,000 |
| | Indicated | 144,000 | 6.76 | |
|-------------+-----------+--------------+---------+----------------|
| | | | | |
| | Inferred | 181,000 | 9.67 | 56,000 |
|-------------+-----------+--------------+---------+----------------|
| | | | | 87,000 |
| | Sub-total | 325,000 | 8.38 | |
|-------------+-----------+--------------+---------+----------------|
| New Catto 1 | | | | 35,000 |
| | Indicated | 22,000 | 49.67 | |
|-------------+-----------+--------------+---------+----------------|
| | | | | 92,000 |
| | Inferred | 84,000 | 33.99 | |
|-------------+-----------+--------------+---------+----------------|
| | | | | 127,000 |
| | Sub-total | 106,000 | 37.27 | |
|-------------+-----------+--------------+---------+----------------|
| New Catto 3 | | | | 52,000 |
| | Indicated | 49,000 | 33.12 | |
|-------------+-----------+--------------+---------+----------------|
| | | | | 77,000 |
| | Inferred | 47,000 | 51.17 | |
|-------------+-----------+--------------+---------+----------------|
| | | | | 129,000 |
| | Sub-total | 96,000 | 41.89 | |
|-------------+-----------+--------------+---------+----------------|
| Other veins | Sub-total | 1,280,000 | 5.93 | 245,000 |
|-------------+-----------+--------------+---------+----------------|
| Grand Total | | 3,980,000 | 10.80 | 1,380,000 |
+-------------------------------------------------------------------+
The resource estimations have been undertaken by Cube Consulting
Pty Ltd.
RESERVE ESTIMATE
Crosscut Consulting of Queensland, Australia were contracted to
undertake a reserve estimation based on the resource wireframe model
provided by Cube Consulting Pty Ltd. A resource totalling 1,380,000
ounces at a grade of 10.8g/t gold was announced on 1 July 2009.
The Probable Reserve as at 14 June 2009, now stands at 1,041,000
tonnes at 14.9 g/t gold containing 500,000 ounces of gold.
This represents an increase of 101% or 251,000 ounces over the
Probable Reserve of 249,000 ounces at 10.8 g/t gold announced in
August 2008. Mine depletion since the 2008 estimate is excluded from
the new estimate. This ore reserve will allow an approximate 5 year
mine life at a production rate of 100,000 ounces per year.
The Probable Reserve was estimated from an Indicated Resource of
1,250,000 tonnes at 15.0 g/t gold containing 603,000 ounces of gold.
The estimate was based on a gold price of US$900 per ounce and a
stope cut-off grade of 3.3 g/t gold.
RESOURCE DRILLING
Discussion
Figure 4 (please see the link at the end of this announcement) shows
a composite map of the veins projected to Level 5 with all the
diamond drill holes from MD 114 to MD 165 totalling 28,985 metres
which have been completed around the Co-O Mine since 1 December 2008.
The drilling east of the Agsao River has been deep to date to ensure
intersections are achieved and to demonstrate the veins are present.
Shallower drilling will also be conducted to ascertain the top of the
mineralisation. It is anticipated that continuing drilling will
expand the resources in this area as vein continuity is confirmed.
Drill results
Table IV summarises the surface diamond drilling results greater than
3 g/t gold over greater than 0.5 metres from the Co-O Mine for drill
holes from MD 114 to MD 165. These drill hole results are the
accepted results that have been incorporated into the new resource
estimate. Other reports containing intersections for holes numbered
up to MD 114 in 2008 are dated 1 December and 11 August 2008. In 2007
the announcements are dated 9 July, 15 May and 28 February. The 2007
announcements also contain information regarding drilling and
surveying techniques, comments on vein interpretation and
methodologies and assaying protocols.
Table IV. Co-O drill hole results >=3 g/t gold and >=0.5 metres
downhole for holes MD 114 to MD 165.
+-------------------------------------------------------------------------------+
|Hole | East| North|Dip |Azimuth| From| Width| Grade (uncut) (g/t|
| | | | (°)| (°)|(metres)|(metres)| gold)|
|-------+------+------+----+-------+--------+--------+--------------------------|
|EAST of| | | | | | | |
|AGSAO | | | | | | | |
|-------+------+------+----+-------+--------+--------+--------------------------|
|MD 127 |614352|912938| -45| 160| 362.70| 1.00| 25.14|
|-------+------+------+----+-------+--------+--------+--------------------------|
| | | | | | 448.10| 0.65| 5.23|
|-------+------+------+----+-------+--------+--------+--------------------------|
|MD 130 |614426|912939| -57| 157| 332.60| 0.60| 4.07|
|-------+------+------+----+-------+--------+--------+--------------------------|
| | | | | | 422.70| 0.75| 6.03|
|-------+------+------+----+-------+--------+--------+--------------------------|
| | | | | | 597.90| 1.30| 33.86|
|-------+------+------+----+-------+--------+--------+--------------------------|
| | | | | | 604.70| 0.70| 9.23|
|-------+------+------+----+-------+--------+--------+--------------------------|
|MD 134 |614450|912991| -60| 159| 442.30| 2.60| 56.08|
|-------+------+------+----+-------+--------+--------+--------------------------|
| | | | | | 620.00| 1.00| 3.27|
|-------+------+------+----+-------+--------+--------+--------------------------|
| | | | | | 636.00| 1.75| 5.00|
|-------+------+------+----+-------+--------+--------+--------------------------|
|MD 139 |614426|912941| -60| 185| 355.40| 1.30| 5.18|
|-------+------+------+----+-------+--------+--------+--------------------------|
| | | | | | 382.40| 1.50| 19.08|
|-------+------+------+----+-------+--------+--------+--------------------------|
| | | | | | 399.75| 0.50| 8.83|
|-------+------+------+----+-------+--------+--------+--------------------------|
|MD 145 |614351|912939| -62| 159| 325.75| 0.65| 4.61|
|-------+------+------+----+-------+--------+--------+--------------------------|
|MD 146 |614432|912959| -58| 158| 328.35| 0.50| 100.27|
|-------+------+------+----+-------+--------+--------+--------------------------|
|MD 153 |614450|912994| -64| 159| 478.05| 2.30| 12.13|
|-------+------+------+----+-------+--------+--------+--------------------------|
| | | | | | 500.90| 1.00| 3.77|
|-------+------+------+----+-------+--------+--------+--------------------------|
| | | | | | 668.60| 1.35| 3.77|
|-------+------+------+----+-------+--------+--------+--------------------------|
| | | | | | 775.40| 1.00| 3.36|
|-------+------+------+----+-------+--------+--------+--------------------------|
|MD 156 |614512|912991| -60| 158| 678.95| 2.85| 19.63|
|-------+------+------+----+-------+--------+--------+--------------------------|
|MD 163 |614351|912939| -45| 165| 325.15| 0.85| 5.37|
|-------+------+------+----+-------+--------+--------+--------------------------|
| | | | | | 498.45| 1.95| 4.11|
|-------+------+------+----+-------+--------+--------+--------------------------|
|MD 165 |614627|912956| -59| 166| 514.20| 2.30| 3.04|
|-------+------+------+----+-------+--------+--------+--------------------------|
|WEST of| | | | | | | |
| AGSAO | | | | | | | |
|-------+------+------+----+-------+--------+--------+--------------------------|
|MD 115 |613935|913000| -77| 190| 51.20| 0.60| 4.05|
|-------+------+------+----+-------+--------+--------+--------------------------|
| | | | | | 198.40| 1.40| 3.82|
|-------+------+------+----+-------+--------+--------+--------------------------|
| | | | | | 283.35| 0.50| 3.84|
|-------+------+------+----+-------+--------+--------+--------------------------|
| | | | | | 332.35| 0.80| 3.06|
|-------+------+------+----+-------+--------+--------+--------------------------|
| | | | | | 347.35| 4.85| 3.91|
|-------+------+------+----+-------+--------+--------+--------------------------|
|MD 118 |613844|912883| -69| 180| 242.20| 0.70| 14.70|
|-------+------+------+----+-------+--------+--------+--------------------------|
| | | | | | 321.40| 1.00| 3.09|
|-------+------+------+----+-------+--------+--------+--------------------------|
|MD 119 |613239|912901| -67| 163| 171.40| 1.70| 10.34|
|-------+------+------+----+-------+--------+--------+--------------------------|
|MD 120 |614127|912738| -73| 193| 246.90| 1.30| 16.54|
|-------+------+------+----+-------+--------+--------+--------------------------|
|MD 121 |613935|913001| -76| 234| 95.65| 0.75| 13.53|
|-------+------+------+----+-------+--------+--------+--------------------------|
| | | | | | 161.80| 1.50| 3.13|
|-------+------+------+----+-------+--------+--------+--------------------------|
|MD 124 |613386|912864| -79| 180| 136.50| 1.60| 16.13|
|-------+------+------+----+-------+--------+--------+--------------------------|
|MD 125 |613766|912844| -77| 180| 232.95| 0.30| 6.60|
|-------+------+------+----+-------+--------+--------+--------------------------|
| | | | | | 267.60| 1.20| 7.95|
|-------+------+------+----+-------+--------+--------+--------------------------|
| | | | | | 452.95| 1.15| 167.63|
|-------+------+------+----+-------+--------+--------+--------------------------|
|MD 126 |614116|912750| -72| 159| 253.60| 1.50| 140.52|
|-------+------+------+----+-------+--------+--------+--------------------------|
| | | | | | 348.95| 0.70| 3.02|
|-------+------+------+----+-------+--------+--------+--------------------------|
|MD 131 |613720|912874| -72| 180| 239.10| 2.35| 6.23|
|-------+------+------+----+-------+--------+--------+--------------------------|
| | | | | | 287.80| 0.70| 5.12|
|-------+------+------+----+-------+--------+--------+--------------------------|
| | | | | | 341.70| 1.75| 11.35|
|-------+------+------+----+-------+--------+--------+--------------------------|
| | | | | | 346.10| 1.50| 7.72|
|-------+------+------+----+-------+--------+--------+--------------------------|
| | | | | | 355.80| 0.65| 3.07|
|-------+------+------+----+-------+--------+--------+--------------------------|
| | | | | | 445.60| 4.50| 7.50|
|-------+------+------+----+-------+--------+--------+--------------------------|
|MD 132 |613403|912867| -52| 150| 206.10| 0.95| 52.18|
|-------+------+------+----+-------+--------+--------+--------------------------|
| | | | | | 208.30| 2.50| 9.55|
|-------+------+------+----+-------+--------+--------+--------------------------|
|MD 133 |613532|912849| -77| 196| 68.35| 1.00| 40.94|
|-------+------+------+----+-------+--------+--------+--------------------------|
| | | | | | 232.95| 2.45| 4.37|
|-------+------+------+----+-------+--------+--------+--------------------------|
| | | | | | 274.70| 0.50| 11.02|
|-------+------+------+----+-------+--------+--------+--------------------------|
| | | | | | 290.10| 1.60| 5.38|
|-------+------+------+----+-------+--------+--------+--------------------------|
| | | | | | 294.85| 1.25| 3.92|
|-------+------+------+----+-------+--------+--------+--------------------------|
|MD 135 |613904|912923| -68| 203| 124.45| 3.55| 4.36|
|-------+------+------+----+-------+--------+--------+--------------------------|
| | | | | | 377.10| 1.45| 3.92|
|-------+------+------+----+-------+--------+--------+--------------------------|
| | | | | | 466.70| 0.80| 13.03|
|-------+------+------+----+-------+--------+--------+--------------------------|
|MD 137 |613710|912859| -81| 180| 384.00| 0.65| 4.04|
|-------+------+------+----+-------+--------+--------+--------------------------|
| | | | | | 521.10| 1.00| 8.74|
|-------+------+------+----+-------+--------+--------+--------------------------|
| | | | | | 533.70| 5.45| 4.65|
|-------+------+------+----+-------+--------+--------+--------------------------|
|MD 138 |613513|912859| -84| 178| 163.35| 1.05| 26.93|
|-------+------+------+----+-------+--------+--------+--------------------------|
| | | | | | 256.10| 2.00| 4.58|
|-------+------+------+----+-------+--------+--------+--------------------------|
|MD 140 |613400|912866| -60| 187| 203.85| 2.00| 7.00|
|-------+------+------+----+-------+--------+--------+--------------------------|
|MD 141 |613709|912874| -74| 221| 244.40| 0.55| 16.33|
|-------+------+------+----+-------+--------+--------+--------------------------|
| | | | | | 264.20| 0.50| 10.93|
|-------+------+------+----+-------+--------+--------+--------------------------|
| | | | | | 286.80| 0.60| 12.83|
|-------+------+------+----+-------+--------+--------+--------------------------|
| | | | | | 500.50| 1.00| 19.13|
|-------+------+------+----+-------+--------+--------+--------------------------|
|MD 148 |613400|912867| -75| 187| 234..90| 1.65| 32.73|
|-------+------+------+----+-------+--------+--------+--------------------------|
|MD 152 |613422|912801| -69| 190| 123.90| 1.25| 9.28|
|-------+------+------+----+-------+--------+--------+--------------------------|
| | | | | | 131.00| 0.80| 40.22|
|-------+------+------+----+-------+--------+--------+--------------------------|
|MD 154 |613875|912807| -55| 190| 124.80| 0.70| 17.63|
|-------+------+------+----+-------+--------+--------+--------------------------|
|MD 155 |614281|912742| -57| 206| 445.60| 1.00| 3.15|
|-------+------+------+----+-------+--------+--------+--------------------------|
|MD 158 |613587|912873| -84| 180| 99.60| 2.50| 8.18|
|-------+------+------+----+-------+--------+--------+--------------------------|
| | | | | | 209.00| 1.15| 31.63|
|-------+------+------+----+-------+--------+--------+--------------------------|
| | | | | | 238.75| 3.05| 18.76|
|-------+------+------+----+-------+--------+--------+--------------------------|
| | | | | | 285.20| 1.80| 12.31|
|-------+------+------+----+-------+--------+--------+--------------------------|
| | | | | | 288.10| 1.00| 3.51|
|-------+------+------+----+-------+--------+--------+--------------------------|
|MD 159 |613788|913252| -45| 190| 197.65| 0.70| 4.47|
|-------+------+------+----+-------+--------+--------+--------------------------|
| | | | | | 370.55| 0.55| 3.43|
|-------+------+------+----+-------+--------+--------+--------------------------|
|MD 160 |613932|912868| -48| 165| 308.80| 0.70| 3.33|
|-------+------+------+----+-------+--------+--------+--------------------------|
|MD 162 |613641|913127| -55| 191| 156.90| 1.00| 3.23|
+-------------------------------------------------------------------------------+
Notes:
(i) All above assays accepted for incorporation
into a resource estimation;
(ii) Grid coordinates based on the Philippine Reference System
92;
On-going drill programme
From early July, drilling with eight surface rigs will continue with
three focussing on the main mine area, three on eastern extensions of
the vein system, and two will start drilling other untested vein
systems adjacent to the mine area.
LINGIG COPPER
The Lingig prospect is covered by a Mines Operating Agreement ("MOA")
over MPSA application number APSA 024-XIII comprising two parcels
situated to the north and to the east (the Lingig porphyry copper
prospect) of the Co-O Mine and millsite as shown on Figure 2. (please
see the link at the end of this announcement).
Figure 5 shows the location of the drill holes completed at the date
of the March 2009 quarterly report. The long section shown on Figure
5 is available in the March 2009 quarterly report. (please see the
link at the end of this announcement).
Three drilling rigs are currently operating at Lingig. An update is
expected during the next quarter.
TAMBIS-BAROBO REGION
The Tambis project, currently comprising the Bananghilig and
Kamarangan prospects, is operated under a Mining Agreement with
Philex Gold Philippines Inc. over Mineral Production Sharing
Agreement ("MPSA") application APSA-000022-XIII which covers 6,262
hectares.
BANANGHILIG
In the 1980s and 1990s a large amount of diamond and reverse
circulation drilling totalling 29,477 metres in 344 holes was
undertaken by various explorers to investigate a large area of
mineralisation.
In 2005 to 2007, Philsaga undertook underground exploration through a
50 metre deep shaft, adits, and underground and surface drilling.
Work has continued on the construction of geological and
mineralisation models.
KAMARANGAN PORPHYRY TARGET
The Kamarangan prospect is centrally located in a large aeromagnetic
anomaly approximately ten kilometres in diameter.
The area is underlain by a steeply dipping, well-banded calcareous
sequence that appears to be at least 1,600 metres wide. The
calcareous sequence has been intruded by a complex of fine- to
coarser-grained diorites and some andesite bodies. The intrusives
have changed the calcareous rocks to skarn rocks over an approximate
area of 1,600 metres by 1,400 metres. The skarn area is open to the
east under the younger overlying limestone. The surface geology
outcrops are limited mainly to magnetite-rich horizons with secondary
hematite.
Some of the skarn rocks may contain variable amounts of garnet,
diopside, epidote and pyrite. Areas of siliceous hornfels and
unaltered massive limestone were also intersected in the drilling.
Discussion
Table V contains a summary of the significant drill hole results.
The intersection of a "fertile" diorite and other vectors from the
drilling indicate a possible porphyry copper source to the
east-northeast of the drilling conducted to date based on:
(i) Copper and gold values in dioritic rocks tend to be
higher in holes KAM 1 and 2, and while visible copper minerals are
present in KAM 4 although at a lower level than in KAM 1 and 2;
(ii) Molybdenum mineralisation is visible in KAM 1 to a
maximum value of 244 ppm and averages 37 ppm over the last 74 metres
of the hole from 357.70 metres depth;
(iii) Molybdenum mineralisation is visible in KAM 2 to a
maximum value of 138ppm and averages 41 ppm over the last 46 metres
of the hole from 405 metres depth. Other less coherent zones are
present higher up in the hole.
(iv) Skarn hosted gold with minor copper mineralisation is
strongest in KAM 7 in the northeast of the drilled area, suggesting
this hole is close to a mineralisation source.
The well mineralised magnetite skarn in KAM 1 (26 to 42.3 metres) and
in KAM 2 (40 to 44.2 metres) and the wide skarn style mineralisation
in KAM 7 (0 to 19.5 metres, 211.1 to 267.1 metres and 410.8 to 426.8
metres) could also be interpreted to be a halo above and around the
250 by 130 metres elongate deep magnetic anomaly shown on Figure 6.
This anomaly could possibly be interpreted as a pencil porphyry style
target. (please see the link at the end of this announcement).
Drill hole magnetite-rich samples will be submitted for estimation of
the magnetite contents and preliminary metallurgical testing if
further assessments regarding the prospect's magnetite potential are
positive.
Further assessment will be undertaken including additional field
work.
Table V. Kamarangan - summary of significant drill hole results
+-------------------------------------------------------------------------------------------------+
|Hole | East | North |Azimuth|Dip | From | Width |Gold |Copper|Lithology |
| | | | (°) | (°) |(metres)|(metres)|(g/t)| (%) | |
|------+------+---------+-------+-----+--------+--------+-----+------+----------------------------|
|KAM 1 |612304| 942837 | 90 | -60 | 26.00| 16.30| 0.43| 0.59|Magnetite skarn |
|------+------+---------+-------+-----+--------+--------+-----+------+----------------------------|
| | |including| | | 29.00| 4.30| 1.21| 1.44|Magnetite skarn |
|------+------+---------+-------+-----+--------+--------+-----+------+----------------------------|
| | | | | | 147.90| 11.80| 0.03| 0.10|Hornfels |
|------+------+---------+-------+-----+--------+--------+-----+------+----------------------------|
| | | | | | 173.70| 14.00| 0.06| 0.16|Diorite |
|------+------+---------+-------+-----+--------+--------+-----+------+----------------------------|
| | | | | | 457.70| 30.00| 0.05| 0.15|Diorite |
|------+------+---------+-------+-----+--------+--------+-----+------+----------------------------|
| | | | | | 495.70| 22.00| 0.03| 0.11|Diorite |
|------+------+---------+-------+-----+--------+--------+-----+------+----------------------------|
|KAM 2 |612307| 942736 | 90 | -60 | 2.00| 49.20| 0.16| 0.16|Diorite with magnetite lense|
|------+------+---------+-------+-----+--------+--------+-----+------+----------------------------|
| | |including| | | 40.00| 4.20| 1.17| 0.43|Magnetite skarn |
|------+------+---------+-------+-----+--------+--------+-----+------+----------------------------|
| | | | | | 210.00| 12.00| 0.03| 0.14|Diorite |
|------+------+---------+-------+-----+--------+--------+-----+------+----------------------------|
| | | | | | 282.00| 18.00| 0.06| 0.11|Diorite |
|------+------+---------+-------+-----+--------+--------+-----+------+----------------------------|
|KAM 3 |612304| 942837 | 270 | -60 | 239.90| 10.60| 0.17| 0.13|Diorite |
|------+------+---------+-------+-----+--------+--------+-----+------+----------------------------|
|KAM 4 |612305| 942597 | 87 | -60 | 31.00| 10.00| 0.06| 0.14|Andesite porphyry |
|------+------+---------+-------+-----+--------+--------+-----+------+----------------------------|
| | | | | | 110.00| 14.00| 0.07| 0.20|Andesite |
|------+------+---------+-------+-----+--------+--------+-----+------+----------------------------|
|KAM 5 |611936| 942847 | 110 | -90 | 360.75| 11.00| 0.11| 0.02|Andesite |
|------+------+---------+-------+-----+--------+--------+-----+------+----------------------------|
|KAM 7 |612215| 943161 | 90 | -50 | 0| 19.50| 0.12| 0.01|Calcareous sediments |
|------+------+---------+-------+-----+--------+--------+-----+------+----------------------------|
| | | | | | 157.10| 16.00| 0.18| 0.09|Skarn |
|------+------+---------+-------+-----+--------+--------+-----+------+----------------------------|
| | | | | | | | | |Skarn with magnetite 239.10 |
| | | | | | 211.10| 56.00| 0.26| 0.09|- 241.10 |
|------+------+---------+-------+-----+--------+--------+-----+------+----------------------------|
| | | | | | | | | |Skarn with magnetite 410.80 |
| | | | | | 410.80| 16.00| 0.22| 0.27|- 418.80 |
|------+------+---------+-------+-----+--------+--------+-----+------+----------------------------|
| | | | | | 446.85| 24.00| 0.64| 0.12|Skarn |
|------+------+---------+-------+-----+--------+--------+-----+------+----------------------------|
| | |including| | | 452.85| 2.00| 7.21| 0.01|Skarn |
|------+------+---------+-------+-----+--------+--------+-----+------+----------------------------|
|KAM 8 |612308| 942561 | 273 | -58 | 50.00| 18.00| 0.17| 0.06|Diorite |
|------+------+---------+-------+-----+--------+--------+-----+------+----------------------------|
|KAM 10|611724| 942581 | 156 | -50 | 132.15| 13.05| 0.09| 0.01|Diorite |
|------+------+---------+-------+-----+--------+--------+-----+------+----------------------------|
| | | | | | 397.50| 10.30| 0.13| 0.24|Andesite |
+-------------------------------------------------------------------------------------------------+
Notes:
(i) Assaying by McPhar Geoservices Phils Inc. Au by fire
assay with AAS finish; Ag, Cu, Pb, Zn and Mo by AAS; and
(ii) Magnetite contents not yet determined
(iii) Grid co-ordinates based on the Philippine Reference
System 92
(iv) KAM 6 - abandoned
(v) KAM 9 - no significant results
ANOLING
The Mines Operating Agreement ("MOA") with Alcorn Gold Resources Inc.
covers Mining Production Sharing Agreement ("MPSA") application
number 039-XIII situated approximately 8 kilometres north from the
millsite as shown on Figure 2. Processing of the Anoling MPSA is
progressing. (please see the link at the end of this announcement).
Mapping and sampling is continuing.
OTHER PROJECTS
* Additional Exploration Areas
During the quarter the Company signed two Mines Operating Agreements
which have a total area of 179 square kilometres increasing the area
to which the Company has exploration access to approximately 881
square kilometres.
A Mines Operating Agreement ("MOA") was signed between Philsaga
Mining Corporation ("Philsaga") and Sursur Mining Corporation
("Sursur") for Exploration Permit applications XIII - 00176, 000180
and 000181 with a total area of 15, 825 hectares (158 square
kilometres) as outlined in red on Figure 2. Sursur will receive a 3%
gross royalty.
A supplementary MOA was signed with Corplex Resources Inc.
("Corplex") to incorporate additional areas of AFTA (XIII) 000004 as
outlined in orange on Figure 2. The additional areas total 2,106
hectares (21 square kilometres) and Corplex will receive a 4% gross
royalty.
* Abacus Project
The Company has returned this tenement to Abacus.
* Saugon Project
Re-mapping and sampling is continuing.
* Bunawan Joint Venture (Medusa earning 70%)
The Company, through its Philippines operating company, Philsaga
Mining Corporation ("Philsaga"), signed a joint venture agreement
("JVA") with Bunawan Mining Corporation ("Bunawan") on 23 August
2007, the Philippine operating company of ASX listed Sierra Mining
Limited ("Sierra"), whereby Philsaga will earn a 70% joint venture
interest in Exploration Permit application ("EPA") 000037-XIII and
Mineral Production Sharing Agreement application ("APSA") 000003-XIII
(together the "Bunawan JV").
The Company notes the announcement dated 17 June 2009 of Bunawan's
Australian listed parent company, Sierra Mining Limited, advising
that EPA 000037-XIII had been denied on "the basis of certification
of non-consent issued by the National Commission of Indigenous
People". Bunawan has indicated they will appeal against the decision.
The Company through Philsaga Mining Corporation has commenced legal
actions to enforce the JVA through Arbitration. A Demand Letter for
Arbitration under the rules of the Philippine Dispute Resolution
Centre Inc. ("PDRCI") has been sent to Bunawan.
CORPORATE
* The Company's Philippines subsidiary company, Mindanao Mineral
Processing and Refining Corporation was granted a four year tax
concession, commencing July 2009.
* Conversion of 2,000,000 unlisted options at $1.25 in late May
2009, which added a further $2.5 million to cash reserves.
* As at 30 June 2009, the Company which is debt free, had a
consolidated cash balance of A$33.1 million.
* The Company was added to the S&P/ASX 200 list on 8 July 2009.
JORC COMPLIANCE - CONSENT OF COMPETENT PERSONS
Medusa Mining Limited
Information in this report relating to Exploration results, is based
on information compiled by Mr Geoff Davis, who is a member of The
Australian Institute of Geoscientists. Mr Davis is the Managing
Director of Medusa Mining Limited and has sufficient experience which
is relevant to the style of mineralization and type of deposits under
consideration and to the activity which he is undertaking to qualify
as a Competent Person as defined in the 2004 Edition of the
"Australian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves". Mr Davis consents to the inclusion in
the report of the matters based on his information in the form and
context in which it appears.
Cube Consulting Pty Ltd
Information in this report relating to Mineral Resources has
been estimated and complied by Mark Zammit of Cube Consulting Pty
Ltd. Mr Zammit is a member of The Australasian Institute of Mining &
Metallurgy and has sufficient experience that is relevant to the
style of mineralisation and type of deposit under consideration and
to the activity which he is undertaking to qualify as a Competent
Person as defined in the 2004 Edition of the "Australian Code for
Reporting of Exploration Results, Mineral Resources and Ore
Reserves". Mr Zammit consents to the inclusion in the report of the
matters based on his information in the form and context in which it
appears.
Cube Consulting is an independent Perth based resource industry
consulting firm specialising in geological modelling, resource
estimation and information technology.
Crosscut Consulting
The information in this report that relates to Ore Reserves is based
on information compiled by Declan Franzmann, B Eng (Mining), MAusIMM.
Mr Franzmann is a full-time employee of Crosscut Consulting.
Mr Franzman has sufficient experience which is relevant to the style
of mineralisation and type of deposit under consideration and to the
activity which they are undertaking to qualify as Competent Persons
as defined in the 2004 Edition of the "Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore
Reserves". Mr Franzmann consents to the inclusion in the report of
the matters based on his information in the form and context in which
it appears.
.
---END OF MESSAGE---
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